Positioning is everything when you’re trying to reach the right leads to market your products and services. A positioning strategy can be the difference between an uphill battle for each lead or an optimized funnel that does the heavy lifting for you. The hard part is simply setting your strategy up.
What is positioning strategy?
A positioning strategy is a marketing plan for determining where your business exists in a market. You can then position your business to better reach your targeted customers. This is a crucial aspect of marketing for any business with a value proposition that demands differentiation. If you’re not simply offering the cheapest option in a market, strategic positioning can improve your profitability.
Also known as “market positioning strategy or “brand positioning strategy,” this approach focuses on making your brand stand apart. You can then employ a differentiation strategy to influence customer perceptions and gain new competitive advantages.
A position statement describes your target market, your product/service's unique value, and how it differs from competitors. It helps guide your marketing efforts by defining your brand's position in the market. Crafting a clear and compelling positioning statement is essential for effectively communicating your brand's value to your target audience.
All brand and product positioning efforts rely on market and customer research. After gaining an understanding of your market and customers, you can target them with:
- An informed channel strategy. A marketing plan that involves selecting the most effective channels to reach and engage with your target audience.
- Customer segmentation. The process of dividing customers into groups based on common characteristics such as demographics, preferences, behaviors, or needs.
- Strategic competitive positioning. Identifying and establishing a unique position in the market that sets your brand apart from competitors.
How to identify your target market
Customer research
It is crucial to include customer research when identifying your target market. This helps you understand your customers' demographics, pain points, preferences, and price sensitivities. This information is essential for developing a positioning strategy that resonates with your target audience.
Customer research involves gathering data on current and potential customers to deeply understand their demographics, pain points, preferences, and price sensitivities. Methods include surveys, questionnaires, interviews, focus groups, using marketing and CRM software, and observational research techniques.
At Simon-Kucher, we understand the critical importance of customer research in identifying and effectively reaching your target market. Our experienced team will work closely with you to understand your business goals, products or services, and target audience
Market segmentation
With market segmentation, you can break down your research into smaller and more meaningful cohorts (groups). Market segmentation is the process of dividing customers into groups. These groups, known as segments, can be based on common characteristics such as demographics, preferences, behaviors, or needs.
You can’t offer a one-size-fits-all option and expect ideal results. However, you can develop highly customized strategies that appeal to the needs of each segment individually. Market segmentation allows you to develop customized solutions. It is essential for effective resource allocation, targeted marketing efforts, and highly tailored strategies that resonate with different customer groups.
At Simon-Kucher, we specialize in helping companies unlock the power of market segmentation to drive growth and profitability. Leveraging advanced analytics and market research techniques, we analyze vast amounts of data to identify meaningful segments within your target audience.
By understanding the distinct characteristics of each segment, we help you allocate resources effectively. This ensures that you focus your marketing efforts on the most promising opportunities.
Quantitative analysis
Quantitative analysis helps identify target markets using objective numerical data such as customer behaviors, preferences, market trends, etc. It involves assessing market sizing, conducting cluster analysis, and quantifying market trends to project opportunities and threats.
First, market sizing is an important step in assessing the feasibility of a target market in the first place. Population counts and purchasing power are key considerations for accurate estimates. You can then break down each market segment you’ve identified in this way.
Speaking of segmentation, you can conduct cluster analysis to help you identify distinct customer segments.
Market trends can (and must) be quantified with sales data, seasonal variation, and other causes of demand fluctuations. These indicators can be used to project emerging opportunities and threats.
Lastly, ensure that you use qualitative analysis to set performance benchmarks that include:
- Key performance indicators (KPI)
- Customer acquisition cost (CAC)
- Customer lifetime value (CLV)
- Projected revenues and returns
At Simon-Kucher, we offer comprehensive support in quantitative analysis to empower companies with actionable insights and data-driven strategies. We provide the insights and tools you need to make informed, data-driven decisions across all aspects of your business, from product development and marketing to pricing and sales.
Competitive analysis
Positioning strategy is all about gaining an edge over your competitors. You can identify and target markets by thoroughly understanding your competitors and finding gaps in their positioning strategies. The goal is to establish the characteristics of your brand that you want at the top of your potential customers’ minds.
Competitive analysis in this context means searching for “market gaps”. This is a complex process that we can certainly help you with. But when engaging in competitive analysis, there are specific questions to keep in mind from the start:
Are there underrepresented market segments we can serve?
- Where are our competitors failing to meet customer needs?
- What pricing strategies are our competitors employing?
- What unique value propositions is each competitor offering?
- Where will there by customer segment overlap?
By learning more about the competition, you also learn more about customer behavior. Put the above questions in the context of what you can expect when you compete for those same market segments.
You can also use the results of competitive analysis as a competitive benchmark. When positioning your brand, try to beat the competition in the areas where your analysis reveals you can. With this, you can now focus your business’s value propositions.
At Simon-Kucher, we can help you stay ahead of the curve and capitalize on market opportunities. We conduct thorough assessments of your industry's competitive landscape, analyzing key players, market trends, and emerging competitors to help you understand the dynamics of your market.
We benchmark your performance against competitors on metrics such as market share, pricing strategies, product offerings, and customer satisfaction, providing valuable insights for strategic decision-making.
Value proposition fit
Do your value propositions fit the needs and desires of your target market?
Your value proposition is the statement that explains the benefit your product or service will provide to customers. It clearly states what makes the product or service unique, and how it solves customers' problems or improves their situation.
Now is the time to use the market research and competitive analysis you’ve compiled to form a positioning strategy. Communicate your products and services’ values in a way that is aligned with what the market needs.
This step involves identifying your SWOTs and adjusting accordingly. Your offerings may need to be changed in one or more of several ways:
- New customizable features. One way to differentiate your offerings is by introducing new customizable features or product variations. For example, a software company might offer different subscription tiers with varying levels of features and customization options to cater to the diverse needs of its customer base.
- Different pricing strategy. Pricing is a powerful tool for shaping customer perceptions of value and differentiation in the market. Depending on your target market and competitive landscape, a different pricing strategy could involve setting your prices higher to reflect a premium positioning or lower to appeal to price-sensitive customers.
- Tailored and unique customer experiences. Providing tailored and unique interactions at every touchpoint, from pre-purchase to post-purchase support, is essential for creating memorable and meaningful customer experiences. This could involve personalizing marketing communications and offers based on customer preferences and behavior, providing expert guidance and assistance throughout the buying process, and offering personalized post-purchase follow-up and support.
You must also communicate the above in your marketing and sales strategies and pricing approach.
Value-based strategies
Value-based pricing strategies entail setting prices according to their perceived value. This customer-centric approach requires grounding your pricing in your customers' preferences.
This approach is crucial to positioning strategy and a more profitable approach to pricing overall. The production costs are not factored into your price, meaning you have much more room to improve your profitability.
When you engage in a new positioning strategy, tailor your pricing to it as well. Ensure that your marketing and sales teams are ready to seamlessly communicate the value that demands the price you charge.
Positioning strategy examples
Breaking into new markets with a clear positioning and pricing strategy
Simon-Kucher recently collaborated with a leading pharmaceutical company aiming to penetrate the Precision Livestock Farming (PLF) market. Its tailored hardware and software solution for cattle farmers required a robust positioning and pricing strategy to ensure a successful market entry.
Our approach involved comprehensive market research, internal and customer interviews, and competitive landscape analysis to identify optimal pricing and bundling options. Through a series of workshops, we collaborated with the client to refine the offer, revenue model, and pricing approach.
This resulted in a simplified offer, improved adoption rates, and a clear monetization strategy for digital offerings. As a result, our client experienced a significant 4% increase in profits compared to the forecast baseline, effectively unlocking better growth in the PLF market.
Read the full case study here.
Building on a strong market position by unlocking untapped potential
Our client, a prominent provider of laser hair removal and cosmetic injectables, sought to bolster their market share. They aimed to implement a more data-driven pricing strategy to unlock additional revenue and profit opportunities.
Adopting a comprehensive three-phase approach, we conducted an initial diagnostic to assess current capabilities. We then supported with research and benchmarking to establish market positioning and identify quick wins.
This informed the development of a pricing model encompassing price, bundle, promotion, and subscription recommendations, supported by a clear business case. Through field-validation and refinement, we fine-tuned the model, subsequently deploying and embedding the new pricing program with tailored reporting and KPI recommendations for ongoing monitoring.
The outcome was a substantial 9% revenue uplift, achieved by optimizing pricing models, defining strategic upsell and cross-sell tactics, implementing regional differentiation, and introducing an engaging loyalty scheme.
Read the full case study here.
How Simon-Kucher can help
Are you searching for high-quality marketing strategies to position your product successfully and create a strong brand awareness? Look no further than Simon-Kucher.
Our expert team specializes in crafting successful positioning strategies that elevate your brand above the competition. Whether you're a new entrant looking to establish a presence or an established player aiming to reposition yourself, we're here to help.
With our tailored approach and deep understanding of market dynamics, we'll work closely with you to develop a strategic positioning plan that captivates your target audience and drives lasting success.
Don't miss out on the opportunity to make your mark – reach out to Simon-Kucher today and let us help you unlock your brand's full potential.
